The U.S. Small Business Administration issued a one-page application form designed to make it easier for applicants to complete the application process to forgive Paycheck Protection Program loans, as well as newly updated and revised forms to conform to the requirements of the latest stimulus legislation.
The COVID-19 relief plan that Congress passed last month revived the PPP with $284 billion in funding for small businesses seeking forgivable loans to help them deal with the financial fallout from the coronavirus outbreak. The law required that the SBA issue simplified forms within the first 24 hours of the legislation’s signing into law. This was done to simplify the process of applying for forgiveness. It also included conditions to encourage community banks to make more loans, especially to minority-owned businesses who had a difficult time getting loans in the past.
“The Small Business Administration met the requirement of releasing the one page form for PPP loan forgiveness by 24 days after the date of enactment of the Consolidated Appropriations Act, 2021,” wrote Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs on his Current Federal Tax Developments blog for Kaplan Financial Education. “The agency also released updated forms.”
Forgiveness terms in the initial draw of PPP loans
Where Do.you Fill.out Forms For Student Loan Forgiveness – First Draw PPP loans made to borrowers who meet the criteria are eligible for full loan forgiveness if within the 8 to 24-week covered period following the loan’s disbursement
- Pay and worker levels are ensured
- The proceeds from the loan may be used to cover payroll costs or other expenses that are eligible.
- Minimum 60% of profits go towards expenses for payroll
Second Draw PPP Loan Forgiveness The terms
Second Draw PPP loans given to borrowers who are eligible can be granted total loan forgiveness if they do so during the 8to 24-week duration following the loan’s disbursement
- Employee and compensation levels are kept in the same way in accordance with the First Draw PPP loan
- The proceeds of the loan could be used to cover the cost of payroll as well as other eligible expenses.
- At least 60% of the proceeds are spent on payroll costs
- When and how do I apply for loan forgiveness?
Once all of the loan proceeds have been used The borrower may apply to be forgiven. Borrowers can apply for forgiveness at any time prior to the maturity date of the loan. Borrowers who do not request forgiveness within 10 month after the date they will be able to repay the loan will be able to receive the loan payment from their PPP lender.